Stash Your Cash: Using Tax Relief Programs for Big Savings
If you’re like many people, the mere mention of taxes makes your eyes cross and your brain turn to mush. Recently though, I ran across some powerful information regarding tax relief programs the average person can apply for on their own.
The programs I’m speaking of relate to property taxes. While they vary from state to state in both type and number, the overall concepts remain virtually the same. They generally fall into three categories: credits, rebates and exemptions. Eligibility can relate to such things as residency, income, age and other allowable categories. While the credit and rebate issues are likely familiar to everyone, the exemptions may not be. With these programs, an allowable dollar amount per category is deducted from the taxable value of your home. The remaining figure is what is used to calculate your property tax.
Sound like peanuts? Au contraire. We recently inquired what our two allowable exemptions would mean to us if we applied them to our recently purchased lakefront property. The new total for annual property taxes would be half of the previous amount. No, you didn’t misunderstand me. No, I did not mis-communicate. Half! Fifty freaking percent! On waterfront property!
It’s important to note that most property tax exemptions are residency based, vary in dollar amount from state to state, and are not transferable from one property to another. Although I have noticed you are usually allowed to apply for all those you qualify for. So it’s definitely not a one or the other type of situation. A few examples I’ve noticed from researching other states? Exemptions for disabled persons, granny flats, homestead properties, widows / widowers, historic properties, senior citizens, disabled and regular veterans, lower level income, blindness and agricultural properties.
You definitely need to take the initiative to apply for these (believe me, they won’t come looking for you), and certain terms for qualification are necessary. The fact remains however, that these programs are out there for you to take advantage of. The process, compared to navigating the income tax code, is relatively simple and the savings are significant. If you are a homeowner looking for a way to shave some extra cash off your overhead expenses, some minimal research into what your state allows could pay off big time.
Living overseas? I’d love to receive some information about tax relief programs around the world. For example, I’ve read about and been advised several times about a nearly 30 percent savings off your taxes in France if you form a foreign investment corporation prior to purchasing real estate. Belize also has some great homesteading and other programs, as I understand it. Please feel free to post any additional information in this regard. Looking forward to hearing from you!